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Essar Ports to invest Rs 10,000 crores in Gujarat

Essar Ports today posted two-fold jump in October-December quarter net profit to Rs 90.42 crore and announced an investment of Rs 10,000 crore to expand capacity by up to 150 million tonne (MT) per annum at two of its ports in Gujarat.

"We have signed an agreement at the recently concluded Vibrant Gujarat summit with the government to expand capacities at the Hazira and Salaya ports," managing director Rajiv Agarwal told reporters here, after announcing the December quarter results.

Diversified Essar Group company's chief executive and director K K Sinha said the company will invest Rs 10,000 crore over the next 10 years in these two ports to expand its overall capacity by about 150 MT.

The company will build five berths at Salaya to handle liquid, solid bulk and container traffic and increase the water front at Hazira by 3 km as part of the agreement, Mr Sinha said.

The company, which inaugurated a 16-mt terminal at Orrissa's Paradip last month to take the total capacity to 104 MT, is on course to achieve the 158 mtpa target by 2015, he added.

For the December quarter, its total revenues jumped 33 per cent to Rs 367 crore on the back of a 44 per cent rise in cargo handling to 14.34 mt for the quarter.

Mr Sinha said the jump in revenues and cost controls helped it achieve the rise in net profit to Rs 90.4 crore from Rs 45 crore in the same period in the year ago.

Mr Agarwal said the company is targeting to close the current fiscal year with a total cargo handling of 55 mt as against 40 mt it had handled in the previous fiscal year.

Around 80 per cent of the expansion to take it to 158 mt capacity has been completed and it will be investing another Rs 1,500 crore for the remaining work, Mr Sinha said, adding the funds have been tied up.

The company's total debt stood at Rs 5,677 crore as of the December quarter. On its bid for the Chennai Mega Container Terminal, Mr Agarwal said it has emerged as the sole successful player as the bid by the Adanis has got stuck for want of security clearance.

"They (Adanis) have asked the Shipping Ministry for a review. Based on the outcome of that, our bid will go ahead," he said, adding they have bid at 5.25 per cent.

Mr Agarwal, however, said apart from Chennai, it will not be bidding for any new projects and will concentrate only on brown-field or expanding at location where it is already present, in the future.

However, the market did not cheer the numbers and the company's scrip settled down nearly 1 per cent at Rs 93.50 on the BSE, whose 30-share benchmark rose 0.74 per cent.